Southern California housing plans must grow by 80% just to be ‘average’

May 18–It may seem like there’s lots of construction going on around Southern California, yet the region’s residential developers are in no way keeping up with the local hiring pace.

In 2018’s first three months, permits were filed for 10,253 new residential units in the four counties covered by the Southern California News Group. Yes, that’s up 4.5 percent in a year, but it’s down 9 percent compared with the average permitting rate since 1988.

My trusty spreadsheet tells me why the modest local construction growth is significant: Bosses in Southern California added 147,000 workers in the past year. That translates to 3.2 extra jobs in Los Angeles, Orange, Riverside and San Bernardino for every unit planned. The statewide hire-to-permits ratio was 2.8; nationally, 1.8.

Or look at the shortfall this way: Local developers would have to ramp up efforts by 80 percent to be on par with the national average. And it’s been 12 years since four-county permitting was even at that higher speed. This building gap helps explain why the area’s freeways are packed and affordable housing is so hard to find.

Yes, builders in Los Angeles and Orange counties did make some progress: 7,350 permits filed in the first quarter, up 8.6 percent in a year and up 14.9 percent compared with the 30-year average. Los Angeles-Orange County employment grew by 83,000 workers in the past year or 2.98 people for every unit planned.

But developers in Riverside and San Bernardino counties fell behind: 2,903 permits filed in 2018’s first three months, down 4.5 percent in a year and off 41 percent from the post-1988 pace. That didn’t stop Inland Empire bosses from adding 53,000 workers in the past year — or 3.9 people for every housing unit permitted in the period.